Overview

Introduction

How do you measure whether a company's stock is priced appropriately? Financial professionals and investors alike recognize that to support its current share price, a company will need to achieve specific levels of business performance. A big-box retailer, for example, might need to open hundreds of new stores and increase same-store sales by 10%. A software company might need to add thousands of student licenses, and hundreds of enterprise accounts. A bank might need to issue millions of new credit cards and increase fee-based advisory services by 15%.

Dow Jones RBP Indexes^SM measure the likelihood that a company can deliver this performance. The methodology of the indexes employs a robust, quantitative approach to measuring whether a company's stock is priced appropriately by addressing two fundamental questions:

1. What is the required business performance (RBP^®) needed to support the price of the stock?
2. What is the probability that the company's management can deliver this business performance?

With answers determined by the index methodology, Dow Jones RBP Indexes^SM provide powerful tools for evaluating and measuring component companies' value. More information on the Dow Jones RBP Index^SM methodology is available at www.djindexes.com.

About the Dow Jones RBP Index^SM Family

The Dow Jones RBP Index Series^SM is a new family of quantitative strategy indexes offered by Dow Jones Indexes. The indexes are created using rules-based, published RBP probabilities supplied by Transparent Value, L.L.C.^® Components of the Dow Jones RBP Indexes^SM are selected based on their RBP^® probabilities.

The first indexes in the series are the Dow Jones RBP 130/30 Indexes^SM, which use RBP^® probabilities to construct indexes of large-capitalization securities that reflect a 130/30 investment strategy. The Dow Jones RBP U.S. Large Cap 130/30 Indexes will use the components of the Dow Jones U.S. Large-Cap Total Stock Market Indexes as the starting universe for component selection. The series is slated to expand to cover a range of markets and market segments.

All indexes in the Dow Jones RBP Index Series^SM are available for licensing as the basis for investment products. Dow Jones Indexes also offers fee-based subscriptions to a database of companies with RBP^® probabilities and related statistics.

Key Features

• Integrity: The indexes are subject to Dow Jones Indexes's stringent standards for data quality and methodological integrity. The indexes are maintained according to Dow Jones Indexes's established calculation and review procedures.
• Quantitative Approach: The Dow Jones RBP Indexes are created based on rules-based, published analytics.
• Timely Updates: The Dow Jones RBP Indexes are calculated and updated in real-time.
• Historical Data Availability: Backtested historical data on the first indexes in the series, the Dow Jones RBP 130/30 Indexes^SM, are available to December 31, 2004.
• Benchmark Availability: Dow Jones RBP Indexes^SM are derived from conventional Dow Jones indexes. Data on these indexes are available for comparative purposes.